BANGKOK, Dec 18 (Bloomberg): Indonesia’s mandate to use more palm oil for producing biofuels and lower reserves in Malaysia will continue to support the tropical oil in the coming months, according to veteran trader Dorab Mistry.
The most-consumed cooking oil may trade between 3,500 ringgit (US$791) and 5,000 ringgit a ton between now and the end of May, unless the war in Ukraine ends, said Mistry, who has been trading palm for about four decades.
"The war has cast a huge unexpected shadow on the world economy,” he said in slides prepared for an industry conference in Goa.
The latest prediction by Mistry, who’s a director at Godrej International Ltd., compared with his November forecast of prices reaching as high as 4,500 ringgit a ton through the end of March 2023.
Mistry Boosts Palm Oil Forecasts as War in Ukraine Continues
Palm oil futures, which recently hit a two-month low, closed 1% higher at 3,918 ringgit on Friday. The vegetable oil had slumped to 3,336 ringgit in late September, it lowest since early 2021.
Mistry said that higher demand from the biofuel industry would continue to support palm prices. His comments followed an announcement by Indonesia, the world’s biggest palm oil producer, on Friday to raise its biofuel blending ratio from January.
The new mandate, known as the B35, will require the country’s biodiesel to contain 35% palm oil from next year, compared with the current 30% mix. The move has the potential to cut palm exports from the country, which accounts for about a third of global edible oil trade. - Reuters
